Here's What Happens When You Don't Pay Off Your 0% APR Credit Card Before the Promotional Period Ends

A 0% APR credit card can be an excellent financial tool. These credit cards offer no interest for a set time. Some cards offer 0% APR on purchases, while others offer 0% APR on balance transfers when you transfer existing credit card debt to your new card. However, you won't be able to enjoy 0% interest forever. That's why paying off your debt before the no-interest period ends is essential. Not paying off your debt in time will cost you.

How 0% APR credit cards work

0% APR credit cards offer no interest for a set time, usually six to twelve months or more. Some card issuers have no interest offers of 15 or 18 months. Choosing a card that offers a lengthy no-interest period will give you more time to pay down your debt. During the promotional period, you won't incur interest charges. Make sure you review the card details to verify whether the 0% APR offer applies to purchases, balance transfers, or both.

You can use these cards in two ways. Some consumers use no-interest cards to avoid credit card interest charges as they pay for new purchases over time. Others get balance transfer credit cards to consolidate existing credit card debt and avoid additional interest charges while they pay it off. When used carefully, these cards can help you save money.

Pay off your balance before the promotional period ends

When using a 0% APR credit card, you'll want to prioritize paying off your balance in full before the promotional period ends. Before getting your card, consider your total expected balance and determine how much you'll need to pay each month to pay off your debt on time.

Let's imagine you get a new no-interest card and charge a $2,400 purchase. If the card issuer offers 0% APR on new purchases for 15 months, you must pay off the $2,400 charge within 15 months to avoid interest. That means you'll need to pay $160 every month.

It's also important to pay at least the minimum amount due and pay your credit card bill every month. Otherwise, you'll likely be charged a late fee. Additionally, some credit card issuers revoke the 0% APR offer for cardholders who miss a payment or make a late payment.

Here's what happens if you don't pay off your debt in time

Whether using your card to pay no interest on new purchases or balance transfers, paying off the balance before the 0% APR period ends is recommended. If not, you'll be charged interest on the remaining card balance. It's essential to review the details of the 0% APR credit card offer to ensure you understand the offer rules and timeline. If not, you may make a mistake that negatively impacts your personal finances.

Is a no-interest card right for you?

A 0% APR credit card could be a good fit for you if you feel confident you can afford to pay your balance off in full before the promotional period ends. It's worth noting that not every consumer will qualify for this type of credit card. For the best chance of approval, you'll want a good to excellent credit score before applying for a no-interest card. If you decide to use this kind of credit card, review all offer details and have a plan for how you will pay off your debt.